Broken Window Theory

The US Government is trying to spend billions more in stimulus money. The same old excuse of "we need to stimulate the economy" is being used to increase government spending so that government employees don't need to participate in this extended recession. But, as we all know, politicians are no lovers of economics or the realities of life. They justify their position by claiming the money spent will be distributed to the community through the spending of the employed government worker, a form of trickle down economics determined by the government authority rather than the liberal position of individual determinants.

This is where the Broken Window Fallacy comes into play. Frederic Bastiat called it the seen and unseen costs of destroying personal property. But Mac, there is no destruction of personal property! Indeed there is, the $12,000,000,000,000 in accumulated debt has destroyed the wealth of the coming years. Business owners know that the day of reckoning is coming very soon, therefore they suspend their ingenuity because they understand that a stable environment is required for risky investment in unproven technologies. The tax requirements to service the debt will be laid on the productive workers in the US (private sector is the only worker that produces wealth). So, where the public service sector might stay employed at 150% the average private sector, the golden goose has been butchered for their magnificent meal. Instead of spending money on innovation and technologies that will employ productive workers and the workers spending money on other productive workers products, those funds will be demanded to service debt so that the government can continue its spending spree.